The Thrill of Defeat

Nancy Hutson is a whip-smart, outspoken 55-year-old biologist who joined Pfizer Inc. as a research scientist in 1981. She spent the next 15 years in drug discovery at Groton Laboratories, and put 35 medicines into development at a total cost of billions. Despite all that time and money, not a single one of Hutson's new-drug prospects ever made it to market. Nothing that she touched, in other words, was a success.

So has Hutson found another line of work? Is she, perhaps, a biology teacher? Or maybe a consultant, that ultimate refuge for someone with a record of relentless commercial failure? Hardly. Since 2000, Hutson has been senior vice president of global research and development at Pfizer and the director of Groton Labs, the largest drug-discovery facility on earth. And before that, she held a series of increasingly important management posts at Pfizer's Central Research Division.

Hutson's ascent in the face of what would be, by the standards of most other industries, a catastrophic series of disappointments, tells you a lot about the rarefied world of pharmaceutical R&D. Drug discovery is a costly slog in which hundreds of scientists screen tens of thousands of chemicals against specific disease targets. After a remorseless round of testing, most of those compounds will prove to be unstable, unsafe, or otherwise unsuitable for human use. Pfizer spends $152 million a week funding 479 early-stage, preclinical discovery projects; 96% of those efforts will ultimately bomb. In today's show-me-the-money corporate world, drug labs like Groton may be unique: Because drug-development projects are parsed out over years and sometimes even decades, and because their rate of attrition is so horrendous, these labs are prisms through which conventional notions of success and failure get stretched and squeezed into strange new shapes. They're also a world in which many of the typical emotional incentives for coming into work each day—the chance to be part of a winning team, to launch a hit new product, to beat a sales target—simply don't apply.

Any business that's developing new products or tackling new markets—any business worth its salt, in other words—faces setbacks; they are the price of ambition. And we're all exhorted to dare to fail. Still, the assumption is that our defeats will be only occasional setbacks—instructional blemishes on our otherwise untainted records of success.

Pfizer's drug-development efforts are failure at its most extreme, and they demand persistence at its most heroic. Want to know how to motivate people to take on almost impossible odds, and then how to lead them through disappointment and loss? Ask Hutson. Drug discovery's high-risk, high-reward model means that she must steel both herself and her talented and ambitious researchers for lifetimes of chronic futility. "As leaders, a big part of our task is to keep the best and brightest minds in research connected to the mission," she says. "At the same time, we have to help them understand that only a tiny minority of them—over their entire careers—will ever touch a winning drug." Within Pfizer, in fact, the scientists who have actually invented a successful compound are viewed as near-mythic figures because there are so few of them. And for the rest? "We have to lead them through failure," Hutson says.

Make no mistake: Groton Labs isn't some academic hothouse where a few eggheads are allowed to toil fruitlessly forever. This is a vast commercial enterprise, and one on which Pfizer depends for much of its future success. More than 4,000 people work on this sprawling campus built on what was once a submarine shipyard in southeastern Connecticut. In Building 220, a massive complex of glass and steel, more than 750 chemists, biologists, and drug-metabolism specialists take on an endeavor that's among the most ambitious of human efforts—to invent medicines that will stop cancer, diabetes, Alzheimer's, and other chronic, long-term diseases. Pfizer might well have the biggest R&D operations of any company in the world. Working out of 16 facilities stretching from California to France and on to Japan, its army of 13,000 research scientists is more than four times the size of IBM's R&D staff. Pfizer's research budget of $7.9 billion is nearly five times that of the world's largest consumer-products company, Procter & Gamble.

And despite the odds, Groton Labs has had a long and storied history. It has previously produced three blockbuster drugs: Feldene, Zoloft, and Zithromax. What's more, it is well positioned for the future: Four vaults, hidden behind a series of alarmed doors in Building 118, contain a priceless armamentarium of 600,000 compounds invented at Groton. Pfizer hopes that at least one of those substances might prove to be the building block for the next Viagra or Lipitor.

Yet for all that, if the previous occupants of this patch of shoreline had designed and built submarines the way its current denizens develop and test new drugs, whole fleets would have slipped to the bottom without a trace. To help her team deal with the daunting odds that face them every day, Hutson has forged a community of people with a common sense of mission. "You can see how people react to her when she walks the halls," says Richard Leider, Hutson's executive coach. "People love her. This is her family, and she treats them that way."

Pfizer's future may well depend on how well Hutson's "family" manages disappointment. A year ago, the company said it would bring an unprecedented 20 medicines to market by the end of 2006. Pfizer chief Hank McKinnell has staked the company's performance—and mostly likely his career—on the ability of the drug giant's scientists to produce new therapies for treating an array of ills, from epilepsy to nicotine addiction to high cholesterol.

Of the thousands of drug-development programs at Pfizer that have ultimately floundered, one quest exemplifies both the tantalizing promise and the daunting odds of those efforts: the 32-year attempt to develop a medicine to treat the devastating complications of diabetes. It is the longest drug-discovery odyssey in Pfizer's 155-year history; it might well be one of the most futile pursuits in the annals of modern drug development. It is also the effort that taught a young Nancy Hutson how to survive a broken heart.

To Make One Life Better

When Hutson arrived at Groton Labs some 23 years ago, Pfizer was a third-tier drug company, and the campus consisted of three buildings. After studying biochemistry at Vanderbilt University and completing a postdoctoral stint at the University of Oxford, Hutson could have spent her career in academe. Instead, she surprised her fellow academics by opting for the hurly-burly of experimental drug discovery. "I wanted to make a difference in people's lives," she says, "and the only way for me to do that was to apply my science in the U.S. pharmaceutical industry, where 99% of the world's drugs are discovered and developed."

When Hutson joined Pfizer in 1981, its pursuit of a drug to treat diabetic complications was already nearly a decade old. The company had predicted what has now come to pass: that diabetes would become a global epidemic. Currently, there are an estimated 151 million diabetics worldwide; that number is expected to increase by 46% within the next six years. So Pfizer's diabetes program long ago passed the first hurdle for any major drug-development effort: the certainty of a huge and growing market. The program also had a particular personal appeal to Hutson: Her husband, Ian Williams, a fellow postdoc whom she met at Oxford and who was hired along with her at Pfizer, has had type 1 diabetes since he was 11 years old. "It was almost my fate to work in diabetes," Hutson says.

Pfizer's research into diabetic complications began in 1972, after university scientists and investigators at the National Institutes of Health identified an enzyme, aldose reductase, that seemed to play a critical role in the slow destruction of diabetics' nerves, eyes, and kidneys. Pfizer scientists scanned the company's library of new molecular entities against the enzyme. They eventually found a molecule that blocks aldose reductase. Other companies were soon trying to develop their own compounds. But within four years, Pfizer synthesized sorbinil, the chemical name for the first orally active aldose-reductase inhibitor.

When Hutson arrived at Pfizer, sorbinil was just entering large-scale human trials. "Those were enormously heady times," she says. "There was a woman in the sorbinil trial who suffered from diabetic neuropathy—the nerves in her feet were so damaged, she couldn't tell whether she was standing on carpet or a tiled floor. But after she tried sorbinil, she regained sensation in her feet. Once I heard that story, I was hooked. To make one life better—that's the most exciting occupation that anyone could have. You have to be indefatigably optimistic to survive in this business. And we were."

It's a refrain you often hear when you probe Pfizer scientists about what enables them to persist. There's a quality of unabashed idealism to what they do, and the hope that a successful project may ultimately save or improve lives can be so awe-inspiring that repeated setbacks seem somehow less significant.

Peter Oates, an expert in glucose metabolism, has harnessed that hope to sustain him through 19 years of work on Pfizer's diabetes project. His mantra: The patients are waiting. "If you have ever massaged cream into the stumps of a diabetic's legs, as I have, or known someone who's died from diabetic renal failure, as many of us have, this is not an empty slogan," says Oates, whose uncle lost both legs to diabetes. "They're not only waiting, they're counting on us."

Still, Pfizer scientists are tackling an obstacle that has thus far proved insurmountable: Diabetes is a chronic, degenerative disease that develops so slowly that it can take years to determine whether an experimental drug is having any impact. After almost a decade of tests—and vast amounts of data that delivered mixed but encouraging results—sorbinil hit a wall. A small percentage of patients in late-stage trials developed a potentially fatal allergic reaction to the sorbinil molecule. It was then that John Niblack dubbed the entire effort a "Vietnam project."

"It was a quagmire," says Niblack, Pfizer's former chief of global R&D, who retired two years ago. "The regulators and our clinical people were extremely worried. And the results from the trials were still unclear. Some people argued that we were closing in and winning. If we stopped, we'd have to write off millions and millions of dollars. Do we soldier on when some patients are getting sick or do we surrender?"

The decision: surrender. "That's the way it is in this business," Niblack shrugs. "Most of your labor is in vain."

It was a searing disappointment for the researchers at Groton—"a death in the family," Hutson says. Some scientists had spent a decade working on the project; when sorbinil crashed, more than a few switched gears and moved into other research programs. "It was the right decision, but I was heartbroken," says Hutson. It was also a watershed moment for her. "Losing sorbinil taught us that you have to keep some of your emotions in reserve," Hutson says, adding that the defeat transformed her into a professional drug developer, tempering her original starry-eyed optimism with a new sense of realistic, if diminished, expectations. "We were just as determined as ever. But did we still believe we'd change the world overnight? No. That dream was over."

Holy Spaces

"We have to help researchers understand that only a tiny minority of them—over their entire careers—will ever touch a winning drug. We have to lead them through failure."

While sorbinil's death cost Pfizer tens of millions of dollars and more than a decade's worth of time and talent, it still didn't quash the company's quest for a breakthrough antidiabetes drug. Even as sorbinil entered late-stage clinical trials, a Pfizer team of medicinal chemists had synthesized a second aldose-reductase inhibitor. Dubbed zopolrestat, it proved to be 40 times more powerful in the test tube than sorbinil.

Early-stage human trials showed that patients tolerated zopolrestat well, but Pfizer's executives were understandably reluctant to once again lay siege to diabetic complications. They were finally swayed by the old cliche: You can't win if you don't compete.

As with sorbinil, more than a decade of tests and trials followed for zopolrestat. With diabetic rats, zopolrestat halted nerve damage and in some cases even reversed it. By early 1999, the results from human trials were encouraging enough for Pfizer to select a brand name for what it hoped would be its first-ever antidiabetes drug: Alond, the runner-up name for the pill that came to be known as Viagra. That January, Forbes predicted that zopolrestat would be one of a new generation of blockbusters to emerge from Pfizer's lab. But as the months progressed, biopsy data showed little difference between patients who received zopolrestat and those who got a placebo. It had taken years of testing to make clear that the drug couldn't do in humans what it had done in rats. On August 12, most of Groton's scientists heard the news at the same time Wall Street did: Zopolrestat was dead on arrival.

After two spectacular flameouts in two decades, it looked as if Pfizer's antidiabetes program was finished. But once again, Pfizer had hedged its bets. Back in 1985, as zopolrestat was heading out of the lab and into clinical trials, Hutson had asked Oates to take a final look at their aldose-reductase research. His brief: Unless he found a new pathway that was worth pursuing, he was to close the program.

"I badly wanted a winner," Hutson says. "Peter would turn over every stone, and if there was another way for treating diabetic complications, he would find it. I told him, 'Just follow the science.' And he did."

Following the science, in fact, was what Oates lived for. A large photograph dominates a wall in his small, spartan office, just off the diabetes lab in B-220. It looks like a swirling galaxy of stars, but it's an electron micrograph of a human cell, magnified 44,000 times. Oates's blue eyes widen as he points out the cell's DNA. The photograph shows what he and other diabetes investigators are really trying to accomplish: to see into an invisible world and take on diabetes at the molecular level. "I've spent my life in that cell, trying to understand the fundamental biomechanisms of diabetes," he says. "This work is exciting, it's draining, it's daunting. We're on a journey into inner space, and there are false leads and unexpected insights all along the way."

The photograph also offers a glimpse of what motivates Oates and his colleagues: the sheer intellectual challenge of this pursuit. With his wire-rimmed glasses and starched white lab coat, and his talk of finding his life's calling in the cytoplasm of a cell, Oates is every inch the pure scientist. His world revolves around the lab and the lab bench—"holy spaces," he calls them, "and I have to breathe that holy air to fully stay alive." He has come to accept that his work may never produce a marketable product, but the scientific insights gained in the holy spaces are enough. "When you look at a glowing cell under a microscope, you're looking at life itself," he says. "It's a mystical experience. That stuff transports me."

For nearly 10 years, Oates and a colleague kept the aldose-reductase program barely alive. It was a classic skunk-works project—offline and largely unfunded. "Their work was an open secret, but we didn't flaunt it," recalls John LaMattina, chief of Pfizer's worldwide R&D operations (and Hutson's boss). "Some people would have been less than thrilled to learn that we were still going forward with this effort."

As he worked through the data, Oates began to build the case that high sugar levels inside the cells of diabetics cause damage primarily because of increased oxidant stress. What's really needed, he concluded, is a new generation of superpotent inhibitors that can block the sugar-linked production of oxidants and so slow the ravages of diabetes on sensitive tissues.

In 1993, Oates, working with other scientists and robot scanners, screened Groton's entire library—at the time, more than 250,000 compounds—against the new target. They found a single compound, CP-131337, that showed a glint of promise. After still more years of testing, Oates was convinced they had come up with a powerful agent that should be declared a candidate for a medicine. Once again, Pfizer would have to decide whether to commit to another antidiabetes drug-development program that would take years and millions. "Declaring a new-drug candidate is a pretty big deal," says Oates. "Some powerful people didn't want to move forward."

In the end, Oates's team prevailed. Despite all the years of failed tests and trials and accumulated data, Pfizer was swayed by a question that has thus far proved to be irresistible—as well as unanswerable: What if this one is the winner? To find out, the compound, known as CAN (for "candidate") 809, is now in early development.

Small Victories

Will CAN 809 finally be the brass ring for Pfizer's diabetes research? Hutson and Oates have long ago stopped investing themselves in such hopes. Sure, he'd like to develop a product that ultimately makes it to market, Oates says, "but that's beyond success. That's supersuccess. That's winning the lottery." Instead, they live for the small victories, the incremental steps that may, someday, pile up one on top of the other to put the ultimate prize within reach. Hutson, for example, has made sure that when a researcher publishes a paper, or when a lab gets some positive results on a new therapy, it's trumpeted throughout the organization. "Science folks don't live for the big day when a drug makes it to market," she says. "They live for the small moments when you see exciting results in journals. Small victories help them to deal with the reality that, in all likelihood, there will be no big victory."

There's another fact of scientific life that helps researchers endure so many failures: Ultimately, theirs is a collective effort. A global village of scientific colleagues is dedicated to the effort to unlock the secrets of diabetes. And as the years have passed, the researchers at Pfizer have come to take comfort in the sense of scientific fraternity. "We all know that diabetes is such a tough problem, we can solve it only by cooperating," Oates says. "Even though a colleague or I may disagree strongly over an interpretation of scientific data, each of us knows that the other individual has also committed his or her life to achieving the same objective. Over time, you grow to love and respect these dedicated, hardworking brothers and sisters in arms." It would be great, Oates says, if Pfizer is the one to solve the problem. "But we would be happy if anyone succeeds, because it hasn't been done yet."

It's unlikely, Hutson points out, that their CEO shares the same magnanimous point of view. And she's right, of course. Three years ago, in an effort to stanch the alarming flow of failed R&D projects, Pfizer dispatched 600 of its top scientists to determine why so many compounds flunked in clinical trials. This Attrition Task Force fanned out across Pfizer's worldwide labs, interviewing researchers and compiling their findings in a vast database of doomed projects. The goal, then and now, is to cut the labs' failure rate to 92%. While that number still seems wildly excessive, it represents a doubling of Pfizer's R&D survival rate, from 4% to 8%.

LaMattina, the chief of worldwide R&D, believes the task force has already helped R&D leaders to rebalance the company's portfolio between high-risk efforts like the antidiabetes program and safer bets, such as a next-generation Lipitor. But he warns that it will take another five years to determine whether there's a major, sustained difference in the survivability of Pfizer's compounds. And even then, Pfizer and the rest of Big Pharma will still be stuck with the same brutal model, since they're at a loss to come up with a better way. "We just love spending hundreds of millions of dollars on every new medicine we develop," Hutson says with a heavy dose of sarcasm. "Don't you think that if we knew how to produce drugs cheaper and faster, we'd do it?"

Of course, there is an alternative model: that of the smaller, nimbler biotechnology companies, which focus narrowly on a few promising areas of research. But John Niblack, for one, rejects that approach. "If the biotech formula is so successful, why has it produced so few innovations?" he asks. The one way to improve your chances of a breakthrough, he suggests, is Big Pharma's equivalent of a human-wave attack, in which hundreds of project teams operate simultaneously in multiple therapeutic areas. Only very few giants like Pfizer can absorb the losses of such an effort—and still continue to invest in the program year after year.

And so how does one judge the diabetes effort? With no marketable drug after decades of trying, is it time to call the program a failure? Niblack is unsparing. "We've learned a lot about diabetes complications and about how to run complex clinical trials, and perhaps that knowledge will serve us well in other areas," he says. "But the pharmaceutical industry is not in the business of publishing white papers. Our job is to invent important new medications that are needed by patients and that pay off for us and our shareholders. Judged by that standard, the program is a failure."

Oates doesn't see it that way, and neither does Hutson. In those inevitable dark moments, when all of the hard work seems futile, Oates recalls a remark that's been attributed to another irrepressible warrior, Winston Churchill: "Success consists of moving from failure to failure without losing heart." The program is progressing and so is the science—and that, in itself, constitutes a victory. Just as time and crushing pressure can transform carbon into diamond, the weight of vast amounts of money and the passage of decades at Pfizer's Groton Labs have turned what most of us might see as failure into something much brighter.

Sidebar: Forged in Failure: How Nancy Hutson helps her team succeed

How does Hutson keep the troops going when they're fighting unbelievable odds? Here, in the words of Richard Leider, Hutson's executive coach, is her plan for leading a high-stakes, big-risk enterprise.

Offer support Nancy's personal mission statement—"To help others succeed"— is the summation of her deepest talents, passions, and values. She established an active commitment to mentoring, and changed performance reviews to focus on strengths. When people are realizing their full potential, they are far better able to persist through setbacks and defeats.

Put people first She had many of the interior walls painted in pastels; she put a Starbucks in the main building; she moved her leadership team into open and accessible quarters. She was signaling, even in small ways, that people come first at Groton.

Celebrate small victories When a researcher publishes a paper, it's communicated throughout the organization. When a lab gets some positive results on a new therapy, the news is announced in a sitewide forum.

Instill leadership She's spreading her leadership philosophy of bringing out people's full potential. Her message: "Despite the inevitable setbacks, we are doing important work. We are engaged in a common purpose; if we pull together, we will succeed."